Turning Citizens into Investors: Promoting Savings with Liberty Bonds During World War I

Increasing savings rates among households of modest incomes would strengthen their balance sheets and reduce wealth inequality. This paper analyzes one of the largest and most successful efforts to increase the savings of ordinary households in American history. The Liberty Bond drives of World War I persuaded tens of millions of Americans to buy government bonds, which were sold in denominations as low as $50, and could be purchased in installment plans. Using newly collected data on the sales of Liberty Bonds at the county level, we analyze the factors that influenced the degree to which the bond drives were successful. The results highlight the importance of the participation of civil society organizations and local banks in marketing the bonds. We discuss the implications of these findings for the design of modern programs to increase savings

National elections as institutions for generating social capital.

ABSTRACT Using data from the 1996 National Election Study, we examine the impact of campaignrelated variables on changes in three individual-level orientations that contribute to social capital: generalized trust in others, trust in government, and external political efficacy. We distinguish four types of election-related effects: political mobilization, psychological and behavioral involvement in the campaign, solidarity ritual, and qualities of the campaign and the candidates. We find, first, that there were significant changes in all three orientations in a social-capital enhancing direction in the aftermath of the 1996 election. Second, each of the three orientations was enhanced by different aspects of the campaign. Finally, these three orientations are locked in a causal system, such that changes in one induce changes in the others. We discuss implications of these results for theories of social capital. 3 The concept of social capital has proven to be enormously attractive to scholars in a wide variety of disciplines. Many political scientists have deliberated about how to identify a role for political institutions in the production of social capital. Effective institutions are not just one of the many unintended blessings of a vigorous civil society; rather, political authority that performs well and equitably contributes to the "trust, norms, and networks" (Putnam 1993:167) that enable people to solve collective action problems. Institutions that require more citizen input may also provide an impetus for people to become engaged in something other than their private lives (Schneider, et al. 1997). In this chapter, we examine national elections as political institutions that may contribute to the production of social capital. We begin by describing three attitudinal orientations that we believe to be part of a social capital dynamic. We then hypothesize four ways in which elections may have an impact on these components of social capital. Finally, we examine these mechanisms using the 1996 American National Election Study. ELECTIONS AND SOCIAL CAPITAL Once the ballots have been counted, do elections have any lingering effects on the American polity? One way in which the effects of elections persist is through the policy changes that may be enacted as a result of leadership turnover (e.g., Brady and Stewart 1991). Our focus on elections, however, is not on their direct outcomes, but rather the changes that may be wrought in the larger civic culture as a result of both the practical conduct of elections and their larger symbolic significance. After reviewing the empirical evidence for election-based change in civic attitudes, we present several hypotheses-which are not mutually exclusive-about ways in which elections may improve citizens' orientations toward the larger political community. Our investigation is founded on two earlier empirical treatments of the origins of social capital These papers reflect our belief that some forms of social capital, particularly as manifested i